The evolving nature of World Bank support for public sector reform

Abstract

Latin America has been at the forefront of public sector reforms throughout the developing world. Compared to Asia and Africa, the Latin American countries have often been leading innovation in state reform. Since the 1980's, countries from Mexico to Argentina, from Colombia to Chile, have initiated and deepened their efforts to achieve a more efficient and accountable state. At the same time, this process has been undergoing a series of changes and has evolved.

The World Bank has been a partner in supporting Latin American countries in their quest for a more efficient state. As reform strategies have evolved over the past twenty years so has the nature of multi-lateral support. This shift in emphasis reflects primarily the changing demands from the countries, but also experiences on the ground. This paper recounts this "evolution", providing a context for the present-day issues addressed by the remaining panel presentations.

State modernization began with a narrow set of so-called First Generation Reforms and later deepened and diversified with Second Generation Reforms. Sound macroeconomic management is still a precondition for growth and prosperity. On the other hand, the problem of weak governance does not stop with capable Finance ministries and deficit control as suggested by the First Generation Reforms.

The principles of efficiency, efficacy, transparency, and responsiveness to citizen demands would need to be incorporated into all government operations for governance to be improved, for which the Second Generation reforms are proposing already an ambitious though worthwhile set of actions beyond the Executive branch. However it it also clear that reforms need to be incremental in order to be succesful-there are no short-cuts to achieving a more efficient public sector.